Correlation Between Sabre Insurance and Various Eateries
Can any of the company-specific risk be diversified away by investing in both Sabre Insurance and Various Eateries at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sabre Insurance and Various Eateries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sabre Insurance Group and Various Eateries PLC, you can compare the effects of market volatilities on Sabre Insurance and Various Eateries and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sabre Insurance with a short position of Various Eateries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabre Insurance and Various Eateries.
Diversification Opportunities for Sabre Insurance and Various Eateries
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sabre and Various is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sabre Insurance Group and Various Eateries PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Various Eateries PLC and Sabre Insurance is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sabre Insurance Group are associated (or correlated) with Various Eateries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Various Eateries PLC has no effect on the direction of Sabre Insurance i.e., Sabre Insurance and Various Eateries go up and down completely randomly.
Pair Corralation between Sabre Insurance and Various Eateries
Assuming the 90 days trading horizon Sabre Insurance Group is expected to generate 2.23 times more return on investment than Various Eateries. However, Sabre Insurance is 2.23 times more volatile than Various Eateries PLC. It trades about -0.07 of its potential returns per unit of risk. Various Eateries PLC is currently generating about -0.25 per unit of risk. If you would invest 14,700 in Sabre Insurance Group on October 18, 2024 and sell it today you would lose (1,500) from holding Sabre Insurance Group or give up 10.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabre Insurance Group vs. Various Eateries PLC
Performance |
| Timeline |
| Sabre Insurance Group |
| Various Eateries PLC |
Sabre Insurance and Various Eateries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabre Insurance and Various Eateries
The main advantage of trading using opposite Sabre Insurance and Various Eateries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabre Insurance position performs unexpectedly, Various Eateries can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Various Eateries will offset losses from the drop in Various Eateries' long position.| Sabre Insurance vs. Norman Broadbent Plc | Sabre Insurance vs. Eco Animal Health | Sabre Insurance vs. Universal Health Services | Sabre Insurance vs. Lindsell Train Investment |
| Various Eateries vs. Guild Esports Plc | Various Eateries vs. Sabre Insurance Group | Various Eateries vs. Ubisoft Entertainment | Various Eateries vs. JD Sports Fashion |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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